Infrastructure- Role in Indian Ecconomy

7/30/2019 Infrastructure- Role in Indian Ecconomy

1/18

INFRASTRUCTURE-ROLEIN

INDIANECONOMY

Asst.Prof. V.R. Kishore Kumar,

M.A., M.Phil

SIBER, Kolhapur


2/18

The link between infrastructure anddevelopment is not a once for all affair. It is a

continuous process; and progress in

development has to be preceded,accompanied and followed by progress in

infrastructure, if we are to fulfill our declared

objectives of accelerating process of

economic development

---V.K.R.V. Rao


3/18

INTRODUCTION

The prosperity of a country dependsdirectly upon the development ofagriculture and industry. Both require

different facilities.All the facilities and services which help

in industrial and agriculturalproduction constitutes collectively theinfrastructure of the economy. Thedevelopment and expansion of these areessential in a country.


4/18

INFRASTRUCTURALFACILITIES

Irrigation

Energy

Transport

Communication

Banking, finance and insurance

Science and Technology

Social Overheads


5/18

COMMONCHARACTERISTICSOF

INFRASTRUCTURE

Infrastructure often described as a Social

Overhead Capital (SOC) in economics to

distinguish it from Direct Production Capital

(DPC).

ALBERT O. HIRSHMAN: SOC is usually defined

as comprising those basic services without

which primary, secondary and tertiary productive

activities cannot function.


6/18

CHARACTERISTICS

Infrastructure is a source of external economies

Infrastructure fall in the category of public goods

Infrastructure development involves heavy costs

Infrastructural development is a kind of

investment which creates conditions for

innovation

Infrastructure stimulates directly productive

activities


7/18

BASICFEATURES

Heavy investments by the government

Provision of infrastructure facilities

mainly for urban areas

Shown not only urban bias but also shown

bias in favor of rich and more affluent


8/18

INDIANINFRASTRUCTUREGROWTH

SINCEINDEPENDENCE

Indian planners are fully aware of the link

between infrastructural facilities and general

economic development and accordingly they

give high priority to the rapid expansion of these

facilities right from the First Five Year Plan

itself

The plans have generally devoted 50% of thetotal outlay for infrastructure development

phenomenal increase


9/18

Trends in Infrastructure Sector

Performance

Unit 1950-51 2004-05 2006-07 2008-09

Energy

Coal MTs 32 413 462 525

Electricity

generatedB Kwh 5 587 663 747

Petroleum

Crude Oil MTs 0.4 34 34 33.5

Finished

SteelMTs 1.0 39 50 57

Cement MTs 2.7 132 154 181.4


10/18

Units 1950-51 2004-05 2006-07 2008-09

Transport&

Communication

Railway goods

trafficMTs 73 602 728 833

Cargo handled atports

MTs 19 384 464 531

Telecommunicati

ons

Total telephonesprovided Millions -NA- 23 272* 353.7

Source: Economic Survey 2009-10, ch9, * as on September 2008


11/18

PRODUCTIONOF INFRASTRUCTURE

INDUSTRIES

The infrastructure industries are the following:

electricity, coal, saleable steel, crude petroleum,

petroleum and cement. These infrastructure industries

have a weight of 26.7 in index number of industrial

production in India (base 1993-94=100)


12/18

TRENDSININFRASTRUCTUREINDUSTRIES

Industry1970-

711980-

811990-

911996-97 2001-02 2007-08 2008-09

Electricitygenerated 55.8 110.8 264.2 394.5 515.0 704.0 724.0

Coal76.3 119.0 226.0 286.0 323.0 450.0 492.0

Finishedsteel 4.6 6.8 13.5 22.7 31.1 55.3 60.9

CrudePetroleum 6.8 10.5 33.0 32.9 32.0 34.0 34.0

Petroleumrefineryproducts

17.1 24.1 48.1 58.5 99.8 156.0 161.0

Cement14.3 18.6 48.8 73.3 106.5 174.0 187.0


13/18

ELECTRICITYANDPOWERGENERATION

According Draft Fifth Year Plan electricity is the most

versatile form of energy and provides an important

infrastructure for economic development. It is a vital

input for industry and agriculture and is of particular

importance to a developing rural sector which needs

more power for its agricultural operations, for its small

scale and agro industries. All sectors of the economy

need electricity for their common needs of water supply,

transport, communication and domestic lighting.


14/18

Given the large scale dependence on lift irrigation for food

productivity, food processing and preservation industries,

the increase in the power intensive industries such as

aluminum, fertilizer, petro-chemicals etc., and the

increasing dependence on electric traction for

transportation, there is hardly any community or sector

which is not effected by a power shortage today. The future

development of the country, therefore will depend upon the

rate of growth of power generation capacity


15/18

EXPANSIONOFGENERATIONCAPACITY

Plan Period Targeted Achieved

IX Plan 40,245 MW 19,015MW

X Plan 41,110MW 21,080MW

XI Plan 78,577MW


16/18

TRANSPORTATION

In modern world, transport along with energy is the

basic infrastructural requirement for industrialisation and

accordingly, the developing countries have accorded it

an important place in their programmes of economic

development.

Specialization and exchange are complementary

Transport Infact provides a vital link between centers ofproduction, distribution areas and the ultimately

customers


17/18

Important means of transport are railways, roadways,

waterways(inland and overseas) and airways.

Rail Transport: the development and expansion of

railways has revolutionized the transport system the

word over.

Operations begun in 1853- Bombay to Thane 34km

Largest in Asia and Second in the World

Total network 63,465km(all guage)

Electrified network 28percent


18/18

Total traffic 2008-09

Passengers 6,791million and 832million tones of freight

Communications: communication means the imparting

or transmission of information.

Necessary for the development of various sectors of the

economy

Most important are postal services, telephone services,

teleprinters, radio and television etc.

Documents

Infrastructure- Role in Indian Ecconomy